Bitcoin Coinbase Premium Hits Rare Low Amid Weakening US Demand

In recent times, the Bitcoin Coinbase Premium Gap has dropped sharply, entering the negative zone, and is currently at one of its lowest levels in the past 18 months.

Key Takeaways

The Bitcoin Coinbase Premium Gap has fallen into negative territory, signaling decreased demand from US traders.
Currently, the Coinbase Premium Gap stands at -$122, indicating a significant discount for Bitcoin on Coinbase compared to Binance.
The metric's low value has been observed only five times in the last 18 months, hinting at changing investor behavior.
Bitcoin's price has remained relatively stable around $88,900, despite the weak demand from American institutional investors.

Bitcoin

Understanding the Bitcoin Coinbase Premium Gap

CryptoQuant community analyst Maartunn recently highlighted significant developments regarding the Bitcoin Coinbase Premium Gap in a post on X. This metric tracks the difference between the BTCUSD price on Coinbase and the BTCUSDT price on Binance.

Coinbase is predominantly utilized by traders in the United States, particularly large institutional investors, whereas Binance caters to a global audience. Thus, the Coinbase Premium Gap serves as an indicator of the different trading behaviors between American and international investors.

When this metric exceeds zero, it indicates that Bitcoin is trading at a higher value on Coinbase than on Binance. This trend suggests that users on Coinbase are exerting greater buying pressure or lower selling pressure compared to users on Binance.

Conversely, a negative indicator entails that Binance may be experiencing more accumulation, with Bitcoin priced higher on their platform.

Here’s the chart shared by Maartunn, illustrating the trend of the Bitcoin Coinbase Premium Gap over the last 18 months:

Bitcoin Coinbase Premium Gap

As the chart indicates, the value of the Bitcoin Coinbase Premium Gap has recently dropped into negative territory, suggesting that American investors are exhibiting increased selling pressure or diminished buying enthusiasm. This decline illustrates a decrease in demand from US traders.

Currently, this metric stands at -$122, meaning Bitcoin is trading at a discount of $122 on Coinbase when compared to Binance. The last time the metric reached such a low was during the price crash in November.

Recent trends show that US institutional investors have significantly impacted market dynamics. Therefore, the Coinbase Premium Gap, which reflects their behavior, tends to correlate with Bitcoin's spot price. This correlation was evident in November, when a market downturn coincided with a negative shift in the premium gap.

While Bitcoin has maintained relative stability despite the low demand from American investors, it remains to be seen how long this stability will persist, especially given the extent of the discount seen on Coinbase. The current value of the Coinbase Premium Gap is one of the lowest recorded in the past 18 months, being matched only five times in this timeframe.

Bitcoin Price Overview

Bitcoin has recently followed a predominantly sideways trend, with its price currently hovering around $88,900.

Bitcoin Price Chart